Housing for all by 2022

Mega housing scheme is in the process, which will offer the affordable houses to more than 5 crore subscribers of retirement fund body Employees’ Provident Fund Organization (EPFO). According to The labour ministry it will support the government’s mission ‘Housing for all by 2022′. The ministry is collaborating with housing finance companies, state-owned construction firms such as; NBCC, PSU banks and authorities like PUDA, HUDA, DDA to build affordable houses at a price to be fixed by the Central Government.

According to sources, “In present Labour ministry is preparing such schemes through affordable houses will be provided to the Employees’ Provident Fund Organization (EPFO) subscribers, especially to those who are in the low or middle bracket”. As per the records currently, there are more than 70 per cent EPFO subscribers, who are below the basic wage, which is Rs 15,000 per month. In the note from the Prime Minister’s office, He asked EPFO to promote affordable housing to only its subscribers and use its funds for that specific purpose. As per calculation EPFO can generate 70,000 crore to create 3.5 lakh additional in low cost, if EPFO will deploy 15 per cent of its funds for low cost housing.

Currently EPFO is managing the corpus of Rs 6.5 lakh crore with the annual incremental deposit of Rs 70,000 crore. The labour ministry is so much interested on a scheme under which EPFO subscribers can withdraw their PF deposits to make part-payment of the total cost of the house. Currently, EPFO subscribers can withdraw any amount of money from their PF accounts to buy houses only after contributing for a period of five years in the schemes run by the body. Ministry is also planning to provide subsidy to the EPFO subscribers who are in low-income bracket and this subsidy will help them to avail benefits of other low-cost housing schemes of the central and state government.

According to sources of Financial Institutions, “The housing loan at low interest rates will fall under priority sector lending for construction of affordable houses, whereas; these schemes will be optional for EPFO subscribers because there is no need to provide affordable houses to those who already own one home”. Under the housing schemes, there are three different income categories such as; high income, middle income and low income. Houses and other financial incentives under the upcoming scheme will be offered on the basis of the income of that particular subscriber.

The subscribers will be free to pay the equated monthly installments of their home loan through their provident fund account. As per the sources, under this scheme EPFO may use can use its funds to create a corpus for providing affordable housing loan at low interest rate to its subscribers.